Struggling Billions: VW-Dachgesellschaft Experiences Deficits at the Onset of the Year
The Volkswagen Group, headquartered in Stuttgart, has reported a slowing in sales and profits in Q1 2024, with overall electric vehicle (EV) sales dipping compared to prior periods. However, the Group remains confident it can meet its full-year financial targets, bolstered by new electric model launches such as the VW ID.7 Tourer and the Porsche Macan EV.
In contrast, Porsche SE, a significant component of the Group, reported a significant loss during this period. The exact loss figures for Porsche SE in Q1 2024 are not detailed in the available sources, but it's clear that this loss has had a negative impact on the Group's luxury segment outlook and annual performance expectations.
Key details on Volkswagen Group's Q1 and overall H1 2025 performance indicate a mild growth in revenue and deliveries (+1% in H1 2025), despite some headwinds like US tariffs costing €1.3 billion and challenges in their truck division (TRATON). The commercial vehicle segment (TRATON) experienced a sales revenue decline of about 10% year-over-year in Q1 2025, with a reduced operating margin (6.2% versus 9.0% previously), reflecting pressures from lower truck sales and rising costs.
Despite these challenges, the Volkswagen Group is successfully shifting focus towards SUVs and electric vehicles. There has been a 64% rise in electric vehicle orders in Western Europe, and new model introductions are foreshadowing turnaround moments. Porsche, as a brand, remains a strong revenue contributor within the Group, generating approximately €36.4 billion in revenues in 2024.
The Group is also pursuing strategic investments and software-driven innovation, notably in the US, while adjusting planning and investments for 2025-29 accordingly.
In the face of short-term profit pressures and declining truck sales, the Volkswagen Group is maintaining a positive outlook due to new EV launches and rising passenger car demand in certain regions. The cost impact from tariffs and restructuring is likely factored into revised forecasts, with a cautious but constructive outlook for the remainder of the year.
The Porsche and Piëch families secured a 25% plus one share stake in Porsche AG’s ordinary shares through the holding company in 2022. The loss incurred by Porsche SE was after taxes and due to a challenging situation with the core investments of the company. The holding company recorded an impairment of €1.4 billion on its Volkswagen AG shares and €168 million on its Porsche AG shares in the first quarter.
The management has adjusted the annual forecast to exclude the value of the Volkswagen and Porsche AG shares in its financial statements due to potential significant fluctuations. As a result, the net debt of Porsche SE increased by €0.1 billion to approximately €5.3 billion by the end of March.
It's worth noting that both Volkswagen and Porsche AG reported significant declines in profits, with the adjusted profit for the first quarter falling to €0.5 billion, less than half of the previous year. Despite these losses, the previously targeted adjusted net income of €2.4 to €4.4 billion for 2025 remains unchanged.
The consolidated net income of the Stuttgart-based DAX company was -€1.08 billion in the first quarter. The families took on billions in debt to secure the stake in Porsche AG’s ordinary shares, and the company still expects a debt level between €4.9 and €5.4 billion by the end of 2024.
This article, published by Staatsanzeiger, discusses the financial performance of the VW group in the first quarter, focusing on the challenges faced and the Group's optimistic outlook for the rest of the year. The article is related to quarterly figures and is about the automobile industry.
The loss incurred by Porsche SE, a significant component of the Volkswagen Group, has had a negative impact on the Group's overall performance and has been reflected in the decline of the Group's luxury segment outlook for the year. In response, the management has adjusted the annual forecast to exclude the value of the Volkswagen and Porsche AG shares in Porsche SE's financial statements.
The Volkswagen Group, despite facing challenges like US tariffs and struggles in their truck division (TRATON), is sustainably shifting its focus towards SUVs and electric vehicles, with a significant rise in electric vehicle orders in Western Europe and new model introductions expected to propel growth.
